Another hocus-pocus in dpwh’s P400-M project?

What’s this I heard from the grapevine that a triple A contractor lent his license to a small-time builder recently so the latter could corner a P400-million Department of Public Work and Highways (DPWH) project in Mindanaoa?

Rumor has it over at the DPWH main office that the license of A.K.N. Construction, owned by engineer Elranie Nunez Sr., was allegedly rented by a certain Cathy Esplana for a fee, to the tune of P28 million or 7 percent of the project cost.

The story goes something like this: The DPWH bidded out a P430-million highway project in Cotabato in February this year. One of the requirements is for the bidder to have a triple A license because of the size of the project.

Rumormongers claim that Esplana, who does not possess an AAA license, joined the bidding, using, of course, the license of A.K.N. Esplana won the juicy project.

The same rumor also says the hocus-pocus involving the lending of the license happened behind the back of Undersecretary Jaime Pacanan, who presided over the bidding of the same project.

Renting of contractor’s license has been a long and common practice among contractors not only at the DPWH but also in other government agencies.

License owners reportedly charge up to 7 percent share or commission from the gross amount of the project that the license borrower will get from the agency.

The problem of lending one’s triple A license to a small-time contractor can be dangerous, according to a DPWH official who requested anonymity.

Contractors who do not have AAA license are not capable of handling over a hundred million pesos’ worth of projects since they may not have sufficient equipment or technical knowledge to finish the project, the same official said.

Projects handled by small-time contractors who borrow licenses usually are sub-standard or left unfinished… worse they end-up as “ghost projects.”

One prime example is the P120-million irrigation and spillway project of the National Irrigation Administration (NIA) in Agusan del Norte in 2012, wherein its contractor abandoned the project, according to a PNP Criminal Investigation and Detection Group (CIDG) probe.

The project required several triple A contractors because of its size. But the winning bidder, Dungan Construction of Pampanga, made sure it will corner the fat contract by borrowing the licenses of six construction firms to make it appear that there are several other bidders.

The end result… Dungan could not deliver since the project was too big for one construction firm, which required a lot of manpower and equipment, according to the police investigation.

The six construction firms–LMG Construction, Wiro Construction, MC Zamora Builders, MG Salazar Construction, Ruiz Construction and Palmea Construction– are now facing charges of violating the License Law Act and the Government Procurement Act.

DPWH Secretary Rogelio Singson should immediately check the veracity of this P430-million highway scam in Cotabato, and try to put an end to this illegal practice of license borrowing or rental once and for all.